Welcome, and thank you for visiting my website. When you apply for a mortgage loan, as your lender, we will carefully evaluate your financial position. We will look at three key factors in determining whether or not to grant a loan: income, savings and credit history.
YOUR INCOME gives you the ability to make monthly mortgage payments. We generally look for two years of stable employment. Someone with less than a two year work history, can in some cases still be approved for a loan, with some additional documentation.
YOUR SAVINGS enable you to pay for the costs associated with the purchase of a home. These costs typically include the down payment, closing costs, prepaids and cash reserves. Each loan program has specific requirements in regard to what the borrower is required to pay. The down payment is usually the largest part of the upfront costs. The closing costs often include (but are not limited to) the appraisal, credit report, closing fee, inspections, a portion of the title insurance, recording fees, flood certification, etc. In some cases, the seller is allowed to pay some or all of these costs on behalf of the buyer. The contract to purchase needs to specify the amount the seller will contribute - there are limits based on the amount of your down payment. The prepaids are the items the lender collects in advance for items like prorated interest, home owner's insurance, property taxes and any other escrow items. Finally, homebuyers need to have enough money to cover unexpected expenses after closing. Typically lenders look for two to three month's mortgage payments in reserve.
